Google signs lease for Sunnyvale offices with space for 2,900 workers

In the midst of an unprecedented growth spurt, Google (GOOG) said Wednesday it has struck a deal to lease four Sunnyvale buildings that could accommodate as many as 2,900 employees.

The Sunnyvale campus would mark Google's largest presence in Silicon Valley outside of Mountain View.

Combined with other property deals the company has confirmed, Google this year alone has committed to adding at least 1.9 million square feet in Mountain View and Sunnyvale -- the equivalent of a major regional shopping mall.

Google intends to make 2011 its biggest hiring year ever, planning to add 6,000 employees worldwide.

The company's robust performance has fueled the aggressive hunt for space. In the second quarter, Google reported $2.5 billion in profits on revenues of $9 billion. But the financial performance was bolstered by more than Google's dominance in Internet searches.

The search giant has seen fast-rising sales from mobile products and display advertising, and has poured resources into products like the Chrome Web browser and Google+. In late July, Nielsen reported that Google's Android operating system had captured 39 percent of the U.S. smartphone market, while Apple (AAPL) had a 29 percent market share and RIM had 20 percent.

Other tech companies are also on a shopping spree for Silicon Valley real estate.

"The Class A office market is very vibrant in Silicon Valley," said Phil Mahoney, an executive vice president with Cornish & Carey. "This is the strongest leasing activity in this area in a decade."

And had Google not snapped up the Sunnyvale property, there was plenty of interest from other tech giants.

"Multiple companies were interested in these buildings," Mahoney said. The four buildings are known as the Ariba Campus and are owned by developer Jay Paul, which also owns the nearby Moffett Towers complex.

"As we continue to grow, it's important to find space for our future employees close to our headquarters," said David Radcliffe, vice president of real estate and workplace services for Google. "That's why we've leased space at Moffett Park's Technology Corners."

In the most recent deal, Google leased 715,500 square feet at the corner of 11th Avenue and Innovation Way in Sunnyvale at the Technology Corners office complex, a short distance from the eastern border of Moffett Field. The deal was arranged through the Silicon Valley offices of realty brokerages Cornish & Carey Commercial and CB Richard Ellis.

Google is expected to move into the new offices in February 2013. Google signed a long-term lease, but other terms weren't disclosed.

The zoning rules in that part of Sunnyvale could enable Google to occupy the buildings with 2,860 employees. Google didn't say precisely how many workers would move to the offices.

"It's fantastic news to get Google," said Connie Verceles, Sunnyvale's economic development director. "It's great that Google continues to expand in close proximity to their headquarters."

Earlier this year, Google said it would occupy a new campus of up to nine buildings totaling as much as 629,000 square feet on Ellis Street in Mountain View.

Before that, in a company milestone, Google announced it would for the first time construct its own office buildings, a campus of up to 595,000 square feet near the corner of Charleston Road and Shoreline Boulevard. The cutting-edge complex is expected to feature eye-catching architecture, an innovative look and green-friendly elements.

Further expansions appear in the works. In recent months, Google has bought up some buildings in parts of Mountain View that would mark yet another new footprint for the company.

Google is far from the only high-profile tech company expanding in the South Bay. Dell, VMware, Facebook, Microsoft, Motorola, Juniper Networks and Box.net have all gobbled up big chunks of office space this year.

"Tech will continue to expand globally," said Erik Davidson, a Wells Fargo economist and deputy chief investment officer for the company's private bank. "Technology is one of the better arrows the Bay Area economy has in its quiver right now."